DoubleU Games Steps Into Merge-2 Boom With $67 Million Turkish Studio Deal

DoubleU Games has officially entered one of mobile gaming’s hottest categories through a landmark acquisition of Paxie Games, the Istanbul-based developer behind the chart-topping title Merge Studio: Fashion Makeover. This strategic move signals the Korean social casino leader’s ambition to diversify beyond its existing portfolio and tap into the rapidly expanding Merge-2 puzzle genre.

The Deal Structure: Phased Acquisition with Performance Milestones

The transaction values Paxie Games at up to $67.0 million, structured as a two-phase commitment. DoubleU Games will acquire a controlling 60% stake at closing for $27.0 million, with the remaining 40% to be acquired over three years contingent on hitting specific financial performance targets. This earn-out structure—potentially worth up to $40.0 million—ties future payments to the studio’s continued success, aligning both parties’ interests.

Closing is anticipated in Q1 2025, with funding sourced through a combination of treasury shares and cash. The phased ownership model demonstrates DoubleU Games’ confidence in Paxie Games’ growth trajectory while maintaining financial flexibility.

Why Merge-2 Games Matter: Market Positioning and Returns

The Merge-2 genre represents one of mobile gaming’s fastest-growing segments, characterized by strong return on advertising spend (ROAS) and exceptionally short payback periods—metrics that appeal directly to publishers seeking efficient growth channels. By acquiring Paxie Games, DoubleU Games gains immediate access to this high-performing category.

Merge Studio: Fashion Makeover exemplifies the genre’s appeal. The game seamlessly blends character customization mechanics with Merge-2 puzzle gameplay, attracting a broad demographic with particular resonance among female players. As of November 2024, the title has surpassed 25 million cumulative downloads and consistently ranks within the Top 5 of its genre globally, according to Sensortower data.

Paxie Games: A Rising Star in Turkish Gaming

Founded in 2021 by Direnç Çelik, Hüseyin Anıl Özmen, Refik Anıl Bulut and Sarenur Başel, Paxie Games operates from Istanbul and has rapidly established itself as a serious player in global mobile gaming. Beyond Merge Studio, the studio maintains live operations for additional titles including Tile Star and Mahjong Infinity, demonstrating development versatility and operational depth.

The studio’s competitive advantages lie in its expertise in crafting intuitive gameplay that encourages extended user sessions, coupled with well-executed LiveOps execution featuring diverse and creative in-game events. These operational strengths position Paxie Games for sustained momentum under DoubleU Games’ expanded resources.

Strategic Synergies: Marketing Muscle Meets Game Development Talent

The acquisition creates meaningful synergies between DoubleU Games’ established U.S. marketing network and Paxie Games’ proven game development capabilities. DoubleU Games currently derives 100% of its revenue from international markets, and this acquisition represents a unique opportunity: Merge Studio and future Paxie Games titles will mark the first time DoubleU Games’ portfolio is actively promoted in Korea, unlocking an entirely new revenue geography.

Jay Choi, Chief Financial Officer of DoubleU Games, emphasized this potential: “We recognize Paxie Games’ competitive edge lies in users’ extended playtime with intuitive gameplay, instant rewards and seamless integration between meta and core game mechanics. Additionally, its operational capabilities are enhanced by execution of diverse and creative LiveOps events.”

Paxie Games’ CEO Direnç Çelik added his perspective on the partnership: “Through our full-scale collaboration with DoubleU Games, we are set to achieve even greater growth by expanding our portfolio with exciting new games, reaching a broader audience, and further growing our business. By leveraging DoubleU Games’ established marketing network in the U.S., we plan to drive substantial growth and expand our reach.”

Turkey’s Gaming Industry: A Global Hotbed

Turkey has emerged as a powerhouse in mobile gaming development, characterized by a dense ecosystem of small and medium-sized studios that punch well above their weight on the global stage. The Turkish market’s recent M&A activity underscores its strategic importance to international publishers.

The most prominent example remains Zynga’s 2020 acquisition of Peak Games for $1.8 billion—a watershed moment that validated Turkish talent and development quality. Peak Games, creator of global hits Toon Blast and Toy Blast, significantly strengthened Zynga’s casual gaming portfolio at that time.

More recently, Dream Games has captured international attention with Royal Match, a title that achieved worldwide popularity and demonstrated that Turkish studios can launch breakout hits independently. The cumulative evidence suggests Turkey has become essential to the global mobile gaming industry’s innovation pipeline.

DoubleU Games’ Evolution

DoubleU Games was founded in 2012 and listed on Korea’s KOSPI exchange in 2019. The company established its market presence primarily through social casino game development and expanded its capabilities through the 2017 acquisition of DoubleDown Interactive Co., Ltd., positioning itself as a significant player in the global social casino segment. This latest move into Merge-2 represents a deliberate portfolio expansion rather than a pivot—supplementing rather than replacing its core competencies.

The Paxie Games acquisition ultimately represents DoubleU Games’ recognition that today’s successful gaming publishers must maintain diverse, high-performing title portfolios. By securing a stake in one of the genre’s proven winners and gaining access to a talented Turkish studio, DoubleU Games is positioned to achieve meaningful growth through both established products and future launches developed collaboratively with Paxie Games.